US stocks closed down today, driven by a sharp decline in the S&P 500 energy sector, after the Federal Reserve said the domestic economy was growing at a solid pace, signaling it remains on track to raise interest rates later this year.
Concluding their first policy-setting meeting of the year, Fed officials said they would be «patient» on raising rates as they looked past the urgent moves made by other central banks this month to boost their struggling economies.
The dollar strengthened further after the Fed statement, putting renewed pressure on oil, which dipped to its lowest level since early 2009. This pushed energy stocks down further.
The Dow Jones industrial average fell 195.84 points, or 1.13 percent, to 17,191.37, the S&P 500 lost 27.39 points, or 1.35 percent, to 2,002.16 and the Nasdaq Composite dropped 43.50 points, or 0.93 percent, to 4,637.99.
The S&P energy sector finished down 3.9 percent as US crude futures tumbled more than 4 percent to $44.31 per barrel. Barclays and Goldman Sachs posted bearish notes on oil earlier in the day.
Greek stocks slumped further as concerns mounted about the banking sector after the election victory of anti-bailout party Syriza and the new government’s cancellation of privatisation plans.
Other European stocks made marginal gains overall, but there were some upbeat corporate earnings reports and tech companies received a boost from Apple’s robust profit growth.
Athens’ ATG share index was down 9.2 percent and the Greek banking index skidded 27 percent, hitting a record low, amid investor fears that the new government’s anti-austerity stance would make negotiations with the euro zone on a new aid deal difficult and jeopardise liquidity, traders said.
The ATG has now lost 15.4 percent since the start of the week, in the wake of Syria’s election victory on Sunday, while the banking index has plummeted 98.7 percent since late 2009, before Europe’s sovereign debt crisis started.
International investors have cut their exposure to Greek banks since then. The combined market value of Greece’s top four – Alpha Bank, Piraeus Bank, National Bank of Greece and Eurobank Ergasias – has fallen to about 11 billion euros ($12.5 billion).
The FTSEurofirst 300 index of top European shares was down 0.1 percent at 1,474.99 points.
Meanwhile, Japanese stocks rose to a fresh one-month high today as expectations of strong corporate earnings and a weaker yen boosted investor sentiment.
The Nikkei benchmark gained 0.2 percent to close at 17,795.73, its highest since December 29, after reversing early losses triggered by profit-taking after disappointing US earnings.
The average rose 1.7 percent yesterday. Market participants were also buying on expectations that Wall Street shares would recover Tuesday’s losses today, as US stock futures rebounded during Asian hours.
Sony Corp gained 2.7 percent after sources said it plans to cut around 1,000 more jobs in its struggling smartphone division. The broader Topix gained 0.3 percent to 1,429.92, while the JPX-Nikkei Index 400 ticked up 0.1 percent to 12,969.74.
Source: Buenos Aires Herald